EEPC India Proposes Faceless GST Audits to Boost Ease of Business

The Engineering Export Promotion Council (EEPC) of India has proposed the introduction of a faceless GST audit system to further enhance the ease of doing business in the country. This forward-thinking recommendation, included in EEPC India’s Budget 2025 proposals, is expected to streamline compliance procedures and reduce operational costs, especially for Micro, Small, and Medium Enterprises (MSMEs).

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Inspired by the Income Tax Department’s successful implementation of faceless assessments, the council believes that incorporating similar technology-driven and anonymous systems into GST audits can significantly improve the regulatory environment for businesses. “A faceless GST audit system would not only simplify processes but also enable MSMEs to channel their resources and energy toward growth and innovation,” said Pankaj Chadha, chairman of EEPC India. He further emphasized that the initiative is critical in creating a more transparent and efficient business ecosystem, eliminating biases and inefficiencies traditionally associated with manual audits.

The faceless GST audit system would harness advancements in digital infrastructure, including artificial intelligence and big data analytics, to assess and verify tax compliance. By removing human intervention, the system aims to mitigate instances of corruption, reduce bureaucratic hurdles, and offer businesses a hassle-free experience. Such technological integration also ensures better data accuracy and consistency while addressing long-standing challenges such as tax evasion and errors in filings. This proposal aligns with the government’s larger vision of leveraging technology to make India a global leader in business reforms.

Moreover, EEPC India highlighted how the implementation of this system could strengthen India’s global standing. By improving its Ease of Doing Business ranking, India would become an even more attractive destination for foreign investors. The council noted that international investors increasingly look for transparent and predictable tax regimes when selecting markets for investment. A streamlined and technology-driven GST audit system could enhance confidence among these investors, thereby fostering higher levels of foreign direct investment (FDI) and bolstering India’s economic growth.

In addition to this transformative proposal, EEPC India addressed specific challenges faced by exporters, particularly in relation to the Reverse Charge Mechanism (RCM). The council suggested extending the Amnesty Scheme to cover RCM-related liabilities. Exporters often encounter unexpected liabilities due to foreign bank charges or international business services, which they may not always be fully aware of. Including these liabilities under the Amnesty Scheme would provide much-needed relief and help exporters resolve legacy issues without incurring excessive penalties.

The council underscored the importance of such reforms in supporting MSMEs, which form the backbone of the Indian economy. With reduced compliance burdens and better access to streamlined processes, MSMEs can allocate more resources toward innovation, capacity building, and market expansion. These reforms would not only boost the competitiveness of Indian businesses globally but also contribute to the government’s vision of a $5 trillion economy.

EEPC India’s proposals for Budget 2025, including the introduction of a faceless GST audit system and the extension of the Amnesty Scheme to RCM liabilities, demonstrate a commitment to fostering a business-friendly environment. These measures, if implemented, could usher in a new era of efficiency and transparency, driving growth and attracting global investments to India.